National Bank Governor Varga pledges stability-focused policies, acknowledges potential for increased inflation
The National Bank of Hungary (NBH) will continue its “disciplined”, “stability-oriented” monetary policy despite increasing economic and financial uncertainty due to trade tensions, according to central bank governor Mihaly Varga. Varga made this statement in Warsaw while participating in an ECOFIN meeting on Friday.
Acknowledging the potential for higher inflation and lower growth in Hungary as a result of the tariff war, Varga emphasized that the country’s economic foundations are stable and growth has resumed. He also highlighted the strong capital position of the local banking sector and the ample liquidity in the system.
The uncertain global economic environment and new tariff measures present downside risks, Varga noted. He stressed the importance of the central bank’s patience in fighting inflation, highlighting that a majority of OECD members and EU states have experienced higher inflation since September 2024.
While the impact of the new tariff measures on inflation is still uncertain, Varga emphasized the necessity of continued disciplined and restrictive monetary policy to achieve price stability and financial market stability in the current environment.
Varga also pointed out challenges facing European capital markets that hinder the continent’s development and global competitiveness. He emphasized the need for harmonizing regulations, increasing transparency, and promoting financial culture to strengthen capital markets.
As the NBH remains cautious in its monetary policy approach, it continues to prioritize stability and discipline in navigating the uncertain economic landscape.
